Yesterday in Washington, Switzerland and the United States of America initialled a revised Double Taxation Agreement – confirming that they have agreed at a technical level to the extension of administrative assistance in tax matters under Article 26 of the OECD Model Convention.
An announcement from Bern indicated that the DTA was negotiated in accordance with key points agreed by the Federal Council. The Swiss Federal Council had said on March 13 that Switzerland would change its policy on international cooperation in tax matters and adopt the OECD standard. That decision will permit an exchange of information on tax matters in individual cases where a specific and justified request has been made. The Federal Council at that time instructed the Federal Department of Finance (FDF) to immediately enter into negotiations on the revision of the DTAs with the USA, amongst others.
A first round of negotiations between the Swiss and US tax authorities reportedly took place from 28 – 30 April 2009 in Bern. The second round of negotiations took place in Washington this week. Starting on 16 June negotiations ended after three days with the agreement being initialled. Bern reports that the initialled text is “confidential” and the cantons and the business associations will have the opportunity to present their views. Once the Federal Council decides on the authorisation for signing (at ministerial level), the agreement will be published.
In the US, Treasury Secretary Tim Geithner said, *”This Administration is committed to reducing off shore tax evasion to help ensure that all U.S. taxpayers are playing by the same rules. This treaty will increase our ability to enforce our tax laws and will help bring an end to an era of offshore accounts and investments being used for tax evasion.”*
A release from the US Treasury Department noted that in recent months, the Administration has demonstrated its commitment to closing the tax gap. *“At the G-20 Leaders’ Summit, the U.S. strongly supported efforts to ensure that all countries adhere to international standards for exchange of tax information. In the FY 2010 Budget, the Administration delivered a detailed reform agenda to reduce the amount of taxes lost through unintended loopholes and the illegal use of hidden accounts by well-off individuals.”*